Council shelves decision on grant administration firm

The Lexington City Council tabled its decision Monday on selecting a new firm to provide Community Development Block Grant administrative services.

BY REBEKAH CANSLER MCGEEThe Dispatch

The Lexington City Council tabled its decision Monday on selecting a new firm to provide Community Development Block Grant administrative services. Before the December agenda was adopted, Newell Clark, mayor of Lexington, requested the agenda be amended to exclude the selection of a new grant administration firm."Due to recent information that has come before the council, I think we should take more time and review the information. I would like to remove the selection of a new grant administration firm," Clark said.Some of the recent information that has been brought before the council includes allegations of forgery and falsified information against Michael Walser, formerly of Hobbs, Upchurch and Associates. Walser recently resigned from Hobbs, Upchurch and formed his own company, Carolina Governmental Services, along with Amanda Whitaker, also formerly employed by Hobbs, Upchurch.Hobbs, Upchurch underwent a review by the North Carolina Department of Commerce — Community Investment. Yadkin County made allegations that Hobbs, Upchurch and Walser had submitted inaccurate and false information to the county on a CDBG application submitted to the Community Investment office. As a result of Yadkin County's review, the Community Investment office contacted other jurisdictions that used Hobbs, Upchurch; this led to further review of a CDBG project in the Town of Haw River. Based upon the review, the Department of Commerce determined there were deficiencies in the documentation that caused noncompliance with CDBG program requirements. The affected jurisdictions had a limited number of days to correct the documentation, depending on the requirements of the grants for which each was applying. An investigation was also opened by the North Carolina Board of Registration for Professional Engineers and Land Surveyors for similar allegations. According to a report from NCBELS, Walser admitted to falsifying the minutes of a selection committee meeting but denied forging signatures for Income and Need Surveys for a CDBG application. After findings, Hobbs, Upchurch was fined $5,000 in July, and Walser was put on probation for one year. Shortly after the probation, Walser resigned from Hobbs, Upchurch. Though Carolina Governmental Services didn't gain legs until recently, Walser filed for a limited liability company with the state's Department of Secretary of State in April. The company address provided to the state is 1580 Yadkin College Road. When the city terminated its contract with Hobbs, Upchurch, Tammy Absher, director of business and community development, said in the interim, Carolina Governmental Services would be used to keep the five current grants on track. She added that it is common practice for grant administration services to volunteer the prep work in hopes of landing the grant."The way grant applications work, the firm will volunteer to assist in application preparation. If we get the grant, they will submit a proposal for the work," Absher said in the Nov. 26 council meeting. "They are not charging to prepare application."While all around the Triad, municipalities and county governments were canceling their contract with Hobbs, Upchurch, halting most grant progress, Lexington went ahead with the five grants: Neighborhood Stabilization Program, the North Carolina Community Development Block Grant Lexington Neighborhood Community Plan Economic Recovery, Lowe's Natural Gas Line Economic Development, Cow Palace Phase I Sewer Infrastructure Improvements and Moran Foods Water Economic Development.The Department of Commerce — Community Investment paid three separate amounts for two different grants between the termination of the Hobbs, Upchurch contract and the Monday night city council meeting. Due to the state's "three-day rule," local governments have three days to distribute the grant funds to vendors. Lexington City Manager John Gray said many of the projects are paid out of city funds and the grant is reimbursement, therefore the city doesn't have to sweat the three-day rule and risk losing the funds. In addition, he was unsure who received the funds from the Oct. 12, Nov. 16 and Nov. 29 payout, but he assumed the funds would have already been paid to Hobbs, Upchurch before the contract was canceled because its employees did the beginning work for the grants. Rebekah Cansler McGee can be reached at 249-3981, ext. 228, or at rebekah.mcgee@the-dispatch.com.